GT Advanced has gained another week to keep the root cause of the company’s bankruptcy filing a secret, reports the Wall Street Journal. Earlier in October, bankruptcy Judge Henry Boroff allowed GTA to hide the details of what went wrong with Apple.
But there is much more than that. You may recall that GT Advanced called the contract inked with Apple ‘”oppressive and burdensome” and asked for the court’s permission to walk away from that contract. However, it was forgetting one important thing: it takes two to tango.
Almost a year ago, Apple agreed to loan $578 million to GT Advanced, its new sapphire manufacturer, to provide the material. It also bought a facility in Mesa, Arizona, for $100 million and leased it to GTA.
Trouble in paradise began as early as February, but there is no public information about that. GT Advanced says it can’t disclose such info because it would be risking paying $50 million in damages to Apple for violating confidentiality agreements. The problem is, GTA’s exit from the sapphire business means it will leave 900 people without jobs and $1.3 billion in liabilities behind.
Apple’s position is pretty obvious: it won’t let GTA leave that easily, so it has sought court permission to file its reply to the contract-rejection motion in secret to comply with the confidentiality agreement it signed with the sapphire producer.
Multiple parties, such as Dow Jones, US Trustee William Harrington, and New Hampshire Attorney General Joseph Foster, moved to challenge the secrecy. Today, however, hours before the hearing, Apple, GTA, and the official committee of GTA’s unsecured creditors all agreed to delay the essential parts of the secrecy challenge to next Tuesday, October 21.